P-Card Program American Express Transition October

Agenda Update Data Analysis Card Types Next Steps 2

Update Finalizing negotiations with American Express Anticipate rolling out new cards in December 2008 – New Cards will be mailed to the cardholder’s work location Procurement Services is finalizing tool kits/training for card selection and card use Data analysis conducted to recommend card type by cardholder for all cards – File will be sent to all BAG Members via – Procurement is available for meetings or conference calls to assist in departmental analysis of recommendations 3

Data Analysis Utilized actual U-M PCard data – All FY08 transactions analyzed – “Open” Cards as of 10/01/08 Issues with the data – Moving target – there are changes to cards daily (limit changes, closures, new cards, departmental transfers of employees, etc) – Data is a picture in time as of October 1, 2008 Procurement Services conducted detailed spend analysis to provide recommendations for each card holder 4

Merchant Grouping Definitions Travel Expenses – Transportation – Air, Rail, Bus, Taxi, – Lodging – Hotel, Motel, Rentals – Restaurant Meals – Prepared meals where dining is primarily onsite Cash ATM and Bank Cashier withdrawals Retail Expenses – Retail Stores and “On-Line” Purchases – Grocery Stores / Caterers – Conference Fees and Registrations – Memberships and License Fees – Retail Services Equipment Repairs Kinko‘s 5

Card Types Corporate Card Green Travel Expenses Cash Expenses No Retail Expenses Purchasing Card Blue Retail Expenses Travel Expenses No Cash 6 2 Cards, but 4 profile options: 1) Purchasing Card with Travel 2) Purchasing Card 3) Corporate Card 4) Both Cards

Analysis Criteria – which card to choose? OPTION 1 Purchasing Card w/Travel – Criteria (Spreadsheet columns): “Other*” > 20% of spend “Travel” > $1,000 of spend “Cash” < $250 of spend – One Card (Blue) – Approximately 2300 current cardholders OPTION 2 Purchasing Card only (no travel) – Criteria (Spreadsheet columns): “Other*” > 20% of spend and “Travel” < $1,000 of spend “Cash” < $250 of spend – One Card (Blue) – Approximately 1500 current cardholders 7

Analysis Criteria – which card to choose? OPTION 3 Corporate Card – One Card (Green) – Approximately 900 current cardholders – Criteria (Spreadsheet columns): “Travel” and “Cash” > 80% of spend 8

Analysis Criteria– when to choose both cards OPTION 4 2 Cards needed: both Corporate Card AND Purchasing Card – Criteria (Spreadsheet columns): “Other*” > 20% of spend and “Cash” > $250 of spend – Two Cards – one Blue and one Green – Approximately 330 current cardholders 9

Issues with Data to be aware of… Approximately 1100 cardholders – “No Spend History” and “Negative Spend” Cards – Likely due to timing of data extracts For these cardholders, please make recommendations if you can: Close card Issue card with current recommended limits, no cash Make appropriate changes to recommendation – If you are unable to make a recommendation, contact Michael Counts or (734) for 10

Things to Remember when reviewing recommendations… Most hosting (grocery stores, caterers) have MCC codes that will require a Purchasing Card (BLUE) Card Holders must have a Corporate Card (GREEN) if cash privileges are required Two (2) CARDS = Two (2) statements – If there are transactions on both cards during the same cycle both cards will need to be reconciled 11

Next Steps Review Cardholder Data – Contact Procurement Services for assistance or with questions Michael Counts : or (734) Provide feedback on recommendations (choose) – Accept Recommendations (we will assume acceptance if we do not hear from you, by stated deadline - yet to be determined) – Request changes to Recommendations Analyze the potential of profile changes for the cardholders – do they really need travel, and most notably in the two (2) card category, (where 2 cards are recommended, current limit will be split between 2 cards - make sure to validate) Please utilize the spreadsheet format provided for submitting changes Communications will begin shortly – s: BAG, Dept. Managers, 3D, Cardholders, Reconcilers, Approvers – Meetings: Procurement Services Customer Forums, UL’s, Departmental upon request 12

Questions/Help Please contact: – Michael Counts Associate Director (734) – Ronald Youngblood Accounts Payable Manager (734) – Carolynn Blankenship P-Card Supervisor (734)